**GBP/USD Update: Pound Struggles Amid Mixed UK Data and US Dollar Strength**
*By Mitrade News Team, original article: [Mitrade News](https://www.mitrade.com/insights/news/live-news/article-1-1034036-20250813)*
The British pound has come under persistent pressure against the US dollar in recent sessions, retreating steadily from recent highs as forex traders digest a flurry of macroeconomic data from both sides of the Atlantic. Against a backdrop of lingering uncertainty about UK growth prospects and interest rate outlooks, GBP/USD has struggled to hold ground above key psychological and technical levels.
This in-depth article covers the recent drivers of the GBP/USD exchange rate, presents a technical outlook, and examines what traders should watch as the new trading week unfolds.
## UK Economic Data Remains Mixed
The pound’s recent performance has largely reflected investor doubts over the strength and resilience of the UK economy. Several data releases have painted a mixed picture, with some pockets of resilience—particularly in the labor market—but persisting worries around consumer spending, inflation, and business investment.
Recent UK data highlights:
– **Employment:** While unemployment remains relatively low historically, there are signs of softening. The latest figures from the Office for National Statistics revealed a mild uptick in the jobless rate, with some surveys indicating that wage growth may be cooling.
– **Inflation:** UK inflation has been exceptionally sticky, lingering above the Bank of England’s 2 percent target far longer than that of other developed economies. However, the latest readings showed inflation edging lower, albeit at a slower pace than anticipated. That could delay any move towards policy easing by the Bank of England.
– **Retail Sales and Consumer Sentiment:** Retail sales came in below expectations, suggesting that consumers remain cautious amid elevated food and energy prices. Consumer confidence measures have recovered slightly from post-pandemic lows but are still historically subdued.
– **Business Investment:** With persistent uncertainty over the post-Brexit trading relationship and global economic headwinds, business investment remains sluggish, weighing on the UK’s growth outlook.
### Bank of England Policy in Focus
The Bank of England (BoE) faces a particularly tricky balancing act. On the one hand, there is pressure to keep interest rates high enough to tame inflation. On the other, ongoing signs of a slowing economy have sparked debate about when and how quickly the central bank might pivot towards rate cuts.
Key points on BoE policy outlook:
– The BoE’s most recent meeting reaffirmed its commitment to keeping policy restrictive until clear progress is made in bringing inflation down.
– Some members have signaled patience, noting that the risks of overtightening and stifling the fragile economy are growing.
– Market pricing has shifted, with fewer investors now expecting imminent rate cuts compared to earlier this year. Nonetheless, expectations for policy easing have not completely disappeared.
## US Dollar Strength Adds Additional Pressure
The US dollar’s broad-based strength has also been a major headwind for sterling. As US economic data has surprised to the upside and Federal Reserve officials have maintained a hawkish rhetoric, the greenback has found favor among global investors.
Major factors supporting the USD:
– **Robust US Data:** The US labor market remains resilient, while inflation has moderated only gradually. Recent GDP revisions pointed to stronger-than-expected growth.
– **Federal Reserve Policy:** Fed officials have repeatedly stressed the need to keep borrowing costs elevated to ensure inflation is contained. Markets now expect US rates to stay higher for longer, supporting further dollar strength.
– **Global Risk Sentiment:** In times of market uncertainty or risk aversion, the US dollar typically attracts safe-haven flows. Persistent geopolitical risks and questions over China’s growth have contributed to the dollar’s appeal.
## GBP/USD Technical Analysis
From a technical perspective, GBP/USD has struggled to sustain rallies and has broken below several important support levels.
Chart analysis recap:
– **Support and Resistance:** After failing to hold
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